The membranes of neuronal and retinal tissue are high in phospholipids containing one or two long chain polyunsaturated acyl chains. Docosahexaenoic acid (abbreviated DHA or 22:6n-3) is the major polyunsaturated acyl chain in these tissues. This study is directed towards determining a molecular basis for the modulation of G protein-coupled receptor signaling by polyunsaturated phospholipids, in particular those containing 22:6n-3 acyl chains. Studies are also focused on the response of these phospholipids to the acute exposure to ethanol. Fluorescence Energy Transfer (FRET) studies have demonstrated lateral domain formation in bilayers containing di16:0PC and di22:6 PC plus cholesterol, which was dependent on the presence of both cholesterol and rhodopsin. Continued FRET studies, along with atomic force microscopy and differential scanning calorimetry, are being pursued in order to characterize lateral domain formation in bilayers of 22:6n-3 containing lipids. Both acyl chain free volume and curvature stress have been invoked as bilayer properties, which modulate membrane protein function. Experiments indicate an inverse relationship between these two properties, suggesting that they may have opposite effects with respect to modulating protein function. Recent studies suggest that the dominant property in modulating membrane protein function will depend on the membrane lipid composition. Cholesterol-sphingomyelin interactions are thought to be the driving force for domain or raft formation in biological membranes. Our studies of the di16:0PC-di22:6PC-cholesterol-rhdopsin system demonstrate that a more general driving force for lateral domain formation is cholesterol-lipid interaction and that protein-lipid interaction can also be a contributing factor. In order to clarify the role of phospholipid composition in domain formation, the partitioning of cholesterol into bilayers of defined lipid composition was studied. A novel method of measuring cholesterol partitioning into lipid bilayers was developed. These studies show that cholesterol partitioning is determined by both phospholipid head group and acyl chain composition. Polyunsaturated acyl chains are among the most effective in reducing the level of cholesterol in lipid membranes, while trans fatty acids increase membrane cholesterol content. These studies are important in developing and understanding the role lipid composition in general and 22:6n-3 acyl chains in particular, in domain formation, the modulation of membrane protein function, the heterogeneous distribution of cholesterol in cell membranes, and the health benefits and deficits associated with polyunsaturated fatty acids and trans fatty acids, respectively.